Forget Full Price, Think Accepted Offer
Forget Full Price, Think Accepted Offer!
What to expect when that offer comes in
Have you ever bought a new car? Or new furniture? Or been to the farmer's market? Clipped coupons? If you have, you've probably gone in trying to negotiate price--lower. As a matter-of-fact, most buyers would argue that they're trying to get the most amount of "stuff" for the least amount of money, and heavy negotations can ensue!
Housing is no exception. We list our house at the price we want to sell it for, and what happens? Invariably a buyer will come in with a less-than-full-price offer. You are not alone. This is the "norm". No offense should be taken. It's entirely typical for a buyer to come in with a less-than-full-price offer. They're trying to get the most amount of house, for the least amount of money (and hey, can you blame them? We'd probably do the same!)
Looking at the attached graph of sale price to list ratio for Tolland County over the last several years, we can see that the average sale price is clearly less than the list price of homes. (As an aside, this doesn't include the market price reductions that you and your real estate agent have been making along the way while your home has been listed. It only includes the most recent list price on the MLS). Currently sale price to list ratio in Tolland County, CT is averaging approximately 98%.
So how can you improve this number and get a closer to list price? Easy. Price accurately in the first place as reflective to your local market statistics and recent home sales. Doing this will automatically improve the ratio, and probably shorten your days on market if you are priced where a value in your home is evident.
What do you do if a less-than-full-price offer comes in? Well, you can accepted the offer. You can counter their offer. Or you can reject their offer. The closer to the "right" price that you are based on the market, the more offers you should have. With more offers you can pick the highest and best one, and get closer to that sales to list ratio. And if you don't have the luxury of a lot of offers? Consider the cost of keeping your house on the market longer versus accepting the offer. Sometimes depending on the motivation for your move, it's actually in your best interest to take the lower offer rather than sit on the market day after day, week after week, waiting for another one to come along-that might be lower than the one that you're negotiating in the first place.